Statement: Congress Abandons Fiscal Responsibility in AMT Patch Vote

PRESS STATEMENT
-For Immediate Release-
December 19, 2007

Contact: Adam Hughes, Director of Federal Fiscal Policy, 202-234-8494, ahughes@ombwatch.org [1]

Congress Abandons Fiscal Responsibility in AMT Patch Vote
Statement of Adam Hughes, OMB Watch Director of Federal Fiscal Policy

WASHINGTON, Dec. 19, 2007— Adding insult to a year of fiscal policy injuries, Congress has abandoned fiscal responsibility by waiving pay-as-you-go (PAYGO) rules in order to pass a one-year patch to the alternative minimum tax (AMT) without offsets. This tax cut adds another $50 billion to an already expanding deficit next year, and will give fewer options for our children and grandchildren to seek solutions to the problems of tomorrow.

This vote is particularly disappointing as Democrats have gone to great lengths this year to comply with PAYGO rules, particularly on spending. From student loan reforms to expansions of the State Children's Health Insurance Program and Food Stamps, Democrats have negotiated the turbulent fiscal waters of the federal budget responsibly, diligently, even courageously. That is why at this point, after all that work and sacrifice, the compromises and the concessions needed to construct balanced solutions to the AMT problem, it is unacceptable for them to abandon their stated principles of fiscal responsibility because they fear Americans will not accept paying up front for the services and benefits the country demands.

While the Democratic leadership in Congress has reneged on one of its main promises even before its first year in power is over, both sides of the aisle share blame for this failure. Stubbornly blocking any attempts to pass revenue-neutral legislation and burying their heads in the sand of blind allegiance to tax cuts at any cost, Republicans who did not support a fiscally responsible solution to the AMT problem did nothing to change their party's recent record of reckless and irresponsible policymaking. President Bush is at the top of this list of obstructionists. Vowing to veto any tax increase regardless of its merits, Bush took away from the limited constructive dialogue on this issue.

It is particularly ironic that this Congress, which has spent months attempting to make a stand for the right priorities against an unyielding White House over a relatively small amount of discretionary spending, would so carelessly vote away a much larger sum through the tax code.

Some in Congress deserve great credit for defending PAYGO. Chief among them are the Blue Dog Democrats in the House, who were able to put their principles and long-term policy goals for the country ahead of election-year politics. Sens. Kent Conrad (D-ND), Russ Feingold (D-WI) and Byron Dorgan (D-ND), long-time lone wolves of true fiscal responsibility, debated passionately to support PAYGO, and their votes did not sway from their rhetoric. Sen. Tom Carper (D-DE) and freshman Sen. Sheldon Whitehouse (D-RI) also deserve high praise for their commitment to fiscal responsibility, rather than pandering to the electorate.

Just because this AMT patch will not appear as an "expenditure" on the federal books does not mean it has no cost. We will all pay for it with increased interest on the over $9 trillion in national debt, and on fewer services and investments in our communities as our government becomes inflexible, unresponsive and brittle under such an enormous mountain of debt. Worst of all, we are passing these costs, and their inevitable limitations, onto future generations, who will struggle to find workable solutions to our national problems.

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OMB Watch is a nonprofit watchdog organization dedicated to promoting government accountability, citizen participation in public policy decisions, and the use of fiscal and regulatory policy to serve the public interest.